Written by The Banking Post
Shares of Islami Bank Bangladesh fell below Tk20 on Sunday (2 November) for the first time in six years, reflecting growing investor concerns over the bank’s deteriorating financial condition.
The stock dropped 5.34 per cent to close at Tk19.50 on the Dhaka Stock Exchange (DSE), marking its lowest level below the Tk20 threshold since 2020.
The decline represents a dramatic reversal from 24 September 2024, when the bank’s share price reached Tk64 and its market capitalisation exceeded Tk10,000 crore for the first time. At Sunday’s closing price, its market value stood at Tk3,139 crore, wiping out nearly Tk7,000 crore from its peak valuation.
The sell-off comes as the bank grapples with mounting financial losses. Islami Bank reported a consolidated profit of around Tk100 crore in the first nine months of 2025. However, it recorded a consolidated loss of Tk3,286 crore during the same period of 2026. Its standalone loss reached Tk3,302.57 crore.
The financial deterioration was particularly severe in the July-September quarter, when the bank posted a loss of Tk1,970.18 crore.
In its financial disclosure, the bank attributed the losses mainly to declining investment income and rising profit expenses on deposits. It said a large volume of classified investments, linked largely to alleged fund embezzlement by connected parties and significant legacy exposures, had restricted investment earnings.
Meanwhile, deposit-related profit expenses increased despite a reduction in the bank’s deposit base.
The scale of the crisis is also evident in its 2025 annual report. Classified loans surged 44 per cent to Tk94,322 crore, accounting for 51 per cent of the bank’s total loan portfolio, compared with 42.36 per cent in 2024.
The bank is also facing a massive provisioning shortfall. Against a required provision of Tk92,537.56 crore, it maintained only Tk7,922.41 crore, leaving a deficit of Tk84,615.15 crore.
A senior bank official attributed the sharp rise in reported bad loans to previously concealed exposures linked to the S Alam Group, which took control of the bank in 2017.
Governance uncertainty has added to the challenges. Islami Bank has been operating without a regular board of directors or managing director since Bangladesh Bank dissolved its board in June 2026. A central bank-appointed administrator is currently overseeing the institution, while an acting managing director is handling its day-to-day operations.
The combination of massive losses, deteriorating asset quality, provisioning deficiencies and governance uncertainty continues to weigh on the bank’s financial outlook and investor confidence.
